Posts: 83
Joined: Mon Nov 06, 2000 2:00 am

Star Alliance In Trouble?

Wed Dec 05, 2001 3:37 am

It occured to me that various members of this alliance are in a very weak financial situation. Both United and Air Canada are in loosing huge sums of money, while Bmi and Austrian are performing poorly. Look at what happened to Ansett, and the ongoing problems for Air newzealand.
Does anybody else think the once untouchable alliance, in terms of standard of service and profitability of members, is strugling and may face total collapse? any ideas for the future of the star alliance? what about virgin as a possible future member?

Posts: 187
Joined: Sun Nov 26, 2000 9:41 am

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 4:51 am

I dont think the Star alliance Airlines are in any worse state at the moment than any of the airlines that are in one world ( BA are not in that good shape, or Aer Lingus come to that.) or Skyteam & the wings Alliance members aren't doing that well Most of the majors in the states aren't doing to well. As regard's Virgin joining Star,What would they bring to the alliance which the Airlines already members dont already offer?

Posts: 584
Joined: Tue Jun 08, 1999 10:28 pm

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 9:51 am

Far from it - the Alliance itself is stronger than ever in spirit, co-operation and in solidarity. There was a meeting last week (regular scheduled) at CEO level. From that meeting came some points that will start to bring them even closer - things such as where one or two carriers are represented at "smaller/less busy" airports where other Star carriers contract out their ground handling, the outsourced carriers will move ground handling to the resident carrier(s). Lounges that are run by outside sources will be closed or merged into other Star airline run lounges is another. All these little things save money and certainly help to keep the "seamless" vision alive.
Star is too big now, but if they were to get another carrier or two then the obvious targets would be Mid-East and/or African carrier/s. Don't think they could fit another Euro carrier in there and the Americas and Asia are well covered.
Posts: 3411
Joined: Sat Apr 29, 2000 5:26 am

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 10:01 am

Sounds like Star is learning from the original and most comprehensive alliance in the world... NW/KLM.

BTW, ther is no such thing as a WINGS alliance.

Posts: 1483
Joined: Tue Oct 10, 2000 10:31 am

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 10:31 am

Well Singapore Airlines is still doing pretty well. Still strong and while on the oneworld side, Qantas is doing quite nicely and is getting better all the time.

I think both oneworld and star should make a big push to include Emirates and Gulf Air into their alliances. More so Emirates than Gulf Air, since they will also inherit SriLankan Airlines as well. Just imagine Singapore Airlines and Emirates in the same alliance!  Wow!
Posts: 1339
Joined: Thu Jan 13, 2000 3:58 pm

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 12:35 pm

Virgin joining an Alliance?

Branson will have to be bloody desperate - he despises alliances, labelling them 'anti-competitive'.


Posts: 1618
Joined: Thu Aug 05, 1999 1:14 pm

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 1:32 pm

Branson despises alliances so much he has joined an equity alliance with SQ. As in all things Branson - never let a moral position stand in the way of a dollar!

I'll believe his pro-competition stance a lot more when both he throws his support behind equal access for all British and US airlines to LHR. Somehow I think I'll be waiting a while.
trans element
Posts: 76
Joined: Wed May 30, 2001 7:01 pm

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 5:10 pm

Singapore is currently not doing too well due to the current economic crisis. But they are slowly picking up the pace.


Posts: 280
Joined: Thu Aug 30, 2001 4:23 pm

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 5:45 pm

It has been mentioned to me that it is known within the European airline industry that the relationship between Lufthansa and United had soured noticeably recently as United was now dumping seats on the US to Germany routes making it very difficult for Lufthansa to compete fairly. This issue relates to the potential prickly relationship between US and EU airlines now that the US airlines have huge subsidies behind them (US$15bn?). I have not heard anything public about this, but apparently there are internal strains. However, I do not know how serious they may get.
Posts: 5880
Joined: Tue Oct 09, 2001 7:56 pm

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 7:07 pm

Star Alliance is not in trouble but its members are, some more, some less. It seems quite plausible that the composition of the group may change in 2002/2003. Thai is a very likeable candidate for exit one way or the other (if Thai government can bring themselves to sell a majority share in the company to a non-Thai company, or by simply going belly-up). Thai leaving the Alliance is a thought I don't like very much, as I appreciate flying Thai very much.

The rumours about a quarrel between LH and UA are definitely true, and understandably so from both sides.

LH is somewhat worried about US government subsidies, that enable US carriers to offer trans-atlantic airfares that are just ridiculous (before anybody starts hollering "hey, it's Andreas again, that LH freak": Just ask yourself: Is this the right way to bring the company back to profitability? I don't think so! There are many examples to prove that empirically, in the US as well as in Europe). On the other hand, UA is currently fighting for sheer survival.

I don't really think this a Star Alliance problem but rather another unpleasant outcome of the current aviation crisis. If this goes on, all carriers worldwide will be in trouble, some earlier, some later.

As for the future of Star Alliance: Don't worry, it will live on. Don't forget, that several companies that are members of the group, like LH and SQ, are already intensifying their cooperation, the same in Europe (LH-SAS). New members are hard to find that meet quality and financial criteria as well. Emirates? Nice idea, good company, but I'm not so sure about feasibility.SQ and EK together with Thai still there, I don't really see the point to have another Alliance hub in Dubai with aircraft ranges getting longer and longer. Now if Emirates is strong not only in the Middle East but also in Africa (I'm not sure about this!), well... but I don't think so!
I know it's only VfB but I like it!
Posts: 80
Joined: Tue Sep 19, 2000 10:30 pm

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 7:15 pm

I read in the news that Aeroflot was offered to join the
Star Group by Lufthansa.Heard about that?Regards
Posts: 730
Joined: Sun Aug 05, 2001 9:25 am

RE: Star Alliance In Trouble?

Wed Dec 05, 2001 7:17 pm

I don't think Star Alliance is in much more trouble than any other alliances throughout the world right now...
But, to truly be a global alliance, I think South African Airways should join the Star Alliance.

Posts: 5880
Joined: Tue Oct 09, 2001 7:56 pm

Aeroflot-777: Are You Serious?

Wed Dec 05, 2001 7:20 pm

Where did you read that???
That must be some sort of pre-Christmas joke. Anyway if you have a source, please let me know.
I know it's only VfB but I like it!
Posts: 80
Joined: Tue Sep 19, 2000 10:30 pm

RE: Aeroflot-777: Are You Serious?

Wed Dec 05, 2001 7:22 pm

I read it on the Russian Aviation Server
that they were offered to join Star by LH but probably
they will stick to Skyteam anyways.Regards
Posts: 2144
Joined: Wed Jan 03, 2001 8:47 pm

RE: Star Alliance In Trouble?

Thu Dec 06, 2001 3:02 am

i would not exaggerate the situation between LH and UA, the relations having become soured.
it is true that LH has complained that american carriers are heavily subsidized and dumped prices across the north atlantic, but there´s not only UA serving trans atlantic routes. LH also has to keep up with DL, AA, CO, NW, US which are also subsidized.
and they can´t go on and complain but exclude UA...

in addition, LH and UA do still compete with each another. there´s still competition between alliance carriers...

If only pure sweetness was offered, why's this bitter taste left in my mouth.
Posts: 2196
Joined: Wed Sep 08, 1999 12:01 pm

RE: Star Alliance In Trouble?

Thu Dec 06, 2001 3:14 am

Star is getting too big. But it does offer seamless travel.
Posts: 3224
Joined: Sun Aug 27, 2000 7:16 am

RE: Star Alliance In Trouble?

Thu Dec 06, 2001 3:27 am

actually, LH and UA don't compete against eachother. They share revenue or losses made on the routes they have a codeshare. Each carrier is responsible for a certain percentage of the business on each flight.

LH was just pissed at UA for going so low on some seats that it undercut the normal price so much that they'd be loosing money. The reason they were pissed is that UA sells 1/2 the inventory on a LH flight. the alliance between the two carriers is with a FEW umbilical cords.... if you understand that.

Anyway, United's problem is that it's trying to be Southwest, something it's never been good at, and the high yield travelers are leaving the airline, just as I may do next year. The unions are killing the airline and refuse to admit it (doh, what do you mean this airline can't afford a 30% increase for 15,000 employeess?? yes the can!) blah, anyway... this airline is SO screwed up Creighton has no idea how to fix it... and until he does, I'll be flying another airline instead of going out of my way to fly ONLY united...

~ ~ ~ ~ pRoFeSsIoNaL hUrRiCaNe DoDgEr ~ ~ ~ ~
Posts: 3233
Joined: Thu Jun 28, 2001 5:50 am

RE: Star Alliance In Trouble?

Thu Dec 06, 2001 6:28 am

This is a bit off topic but in referance to Nate's comment about the Unions killing UA. The ALPA has done much more damage than the IAM has.
IAM members haven't had a raise since 1996. Management, and Pilots and FA's all got their peice of the pie.
Now management's stalling and this crisis have denied me and my family a real pay increase. I for one want something before I give back. I can't give back when I haven't received anything.
As far as STAR is concerned this is the first real test at weather an alliance can weather economic crisis. STAR routes and the groung handling agreements make it more profitable to stay together than to leave. For example UA does all STAR ground handling at IAD for UA LH OS BD SK and the same is true in ORD. AC has stayed in PHL dropping only one flt to YYZ. That saved 15 UAL jobs in PHL. Don't look for these partners to go it alone unless they intend to pull out of those cities all together.
A little less Hooah, and a little more Dooah.
Posts: 1104
Joined: Wed Oct 10, 2001 1:19 am

RE: Star Alliance In Trouble?

Thu Dec 06, 2001 7:36 am


Tell me: how exactly is United trying to be like WN?

With Shuttle eliminated, the only way they are similar is that UA has been offering steep discounts leading to ultra-low nationwide airfares...

This is not a change in business plan, but rather a response to stimulate travel again.

The two things UA needs to learn from WN are:
  • employee satisfaction
  • attracting the "high-yielding" "low-yielders" (a tough concept to grasp)... but with an above-average leisure yield, the airline won't be hit as hard when biz travl/high yields slump.

  • SFO
    Posts: 3224
    Joined: Sun Aug 27, 2000 7:16 am

    RE: Star Alliance In Trouble?

    Thu Dec 06, 2001 11:41 am

    what kinda inflight service does United offer in coach now?????

    where are all these Shuttle 737s showing up??

    when is United going to reconfigure these birds? Oh wait, they'll be like that until they retire.

    In terms of the IAM raise, my friends @ UAL are all making over $12 an hour, as posted in another post and after checking with them, they're making decent money, especially with lots of OT. For the 141-M, I suggest some of these folks stop watching the Sopranos on HBO, as they're all a bunch of mobster types in my book....

    anyway, in regards to the Star, it is the largest and most widespread of any alliance, it's a matter of the partners working together to keep costs down, instead of each unit trying to do it on their own.

    ~ ~ ~ ~ pRoFeSsIoNaL hUrRiCaNe DoDgEr ~ ~ ~ ~

    RE: Star Alliance In Trouble?

    Thu Dec 06, 2001 12:16 pm

    Ansett is still a Star Alliance member and when the new owners take control on the 2nd of February AN III will be up and running with Star again.